Single biggest mistake about your refund policy

Remember the last time you bought a digital product, and its order page cheerfully greeted you with the following message:

“30 day full refund guarantee! No questions asked!”

What the company is trying to do here is comfort the buyer with the feeling that they can’t go wrong. If anything, there’s always Cmd-Z right there.

But here we have a problem.

I’m all for removing purchase anxiety, but “no questions asked”? If anything, you need to talk to the lost customer.

I see where the idea comes from. Sellers of offline goods try to accommodate their buyers by being upfront about removing the embarrassing experience of returning a purchase altogether.

We all hate facing the truth of making a bad decision. As buyers, we’ll often blame the product itself, circumstances, or stars not aligned properly, instead of admitting that we didn’t do due diligence before the purchase. And sure as hell, we won’t like painful attempts to reverse the decision or just being judged. So we just try to make it look like the purchase was wrong for objective reasons, and go all please-don’t-talk-to-me-i-just-want-my-money-back about it.

In the digital products world though, there’s no face-to-face interaction. Buyers are used to shallow research and fast purchases, so if something goes wrong, they expect fast refunds.

That’s where we as sellers can’t blindly follow the physical commerce practices. Our buyers are much less likely to feel embarrassed. It’s so easy for them to shoot an honest one sentence email when properly asked. That’s pure gold that we can’t flush down the toilet.

Or maybe your product is wanted but it was the wrong customer. Perhaps they didn’t understand the product value, or were improperly onboarded, etc. Whatever the reason, your product failed to do the job. But it’s only the beginning of other failures if you didn’t figure out why. Just imagine: the buyer visited your website, was convinced by your value proposition, successfully completed your free trial, finally converted (hello insane CAC rates), and then… just left you in limbo.

I’ve yet to see an online business that can afford to lose a data point like this. Mine is certainly not one.

That’s why for the sake of future customers we should ask as many questions as the failed customer can handle. Having them talk is another challenge but we’ll leave it to another post.

For now, I have to apologize in advance. If you request a refund from me, I’ll process it and then I will ask you as many questions as the situation requires. And if you don’t respond, I’ll try again and again. Feel free to do the same to me. 🙂